My long term career objective is to define the mechanisms of liver inflammation in nonalcoholic steatohepatitis (NASH). The current proposal views this via a systems biology approach, focusing on defining the cross-talk between lipotoxic hepatocytes and proinflammatory macrophages at a cellular level; and the endoplasmic reticulum stress sensor Inositol Requiring Enzyme-1 alpha (IRE1?) and extracellular vesicle (EV) biogenesis at a sub-cellular level. Signals from injured hepatocytes serve to recruit macrophages to the liver, activate proinflammatory pathways in resident and recruited macrophages and thus set in motion an inflammation-injury feed-forward loop. In preliminary experiments we have observed that lipotoxic hepatocytes (treated with the toxic free fatty acid palmitate) release proinflammatory extracellular vesicles; these vesicles are released in an IRE1?-dependent manner; and are enriched in ceramides. Furthermore, the ceramide enrichment also occurs in an IRE1?-dependent manner. Our preliminary observations have led to the central hypothesis that IRE1? regulates palmitate-induced extracellular vesicle biogenesis and cargo, thereby leading to the release of proinflammatory extracellular vesicles, which in turn activate macrophages thus promoting NASH pathogenesis. Therefore, the goals of this proposal are to understand: i) how IRE1? mediates release of lipotoxic EVs; ii) what imparts specificity t lipotoxic EV cargo, and iii) how are lipotoxic EVs proinflammatory? The proposed experiments will employ complementary in vitro and in vivo models of lipotoxicity and NASH, respectively; and chemical, pharmacological, molecular and genetic approaches to address the specific aims to test the hypotheses that: i) IRE1? and the IRE1?-activated transcription factor, X- box bindin protein-1 (XBP-1) drive the release of lipotoxic hepatocyte EVs via increased biogenesis of ceramides, and ii) IRE1?-mediated ceramide transport is necessary for EV release, and iii) IRE1?-dependent proinflammatory EV release in vivo leads to macrophage recruitment and liver inflammation. To address these hypotheses the applicant has become adept at EV isolation and characterization, macrophage isolation, assays of macrophage activation and chemotaxis, transcriptional regulation, metabolomics by mass spectrometry and in vivo rodent models of conditional deletion of IRE1?. With funding through this R03 small grant program for K08 awardees the applicant hopes to gain additional preliminary data to propel this research proposal to an R01 proposal in the near future. This work represents a coherent and logical extension of the applicant's earlier work on endoplasmic reticulum stress in the pathogenesis of NASH and represents a significant step forward in independence from previous research mentors. The applicant has established a network consisting of Dr. Gregory J. Gores as her primary mentor, and Dr. Vijay Shah and Dr. Nicholas LaRusso as collaborators. Our results will yield mechanistic insights into the processes of macrophage activation and recruitment in NASH, thus identifying potentially druggable targets.